Energy efficiency advocates are working to enlist broader support and leverage existing influential backers at a time when government commitment is becoming more uneven across North American jurisdictions.

The strategy behind Kitchener’s revitalization

How a mid-size city went from desolate to a true people place

Tuesday, November 4, 2014

By Rebecca Melnyk

About 15 years ago, the streets of downtown Kitchener, Ont. were full of abandoned factories, decaying buildings and empty parking lots. The Canadian dollar was rising and a predominant manufacturing sector faced the reality of severe job loss, potentially driving the downtown area obsolete. Then a group of forward-thinking planners set out to revitalize the city, using a unique economic redevelopment strategy unlike any other.

Cory Bluhm, manager of downtown development for the City of Kitchener, recently stood in front of a crowd at the 2014 Brownfields conference in Toronto, pointing to a large photograph he had taken back in the 1990s of an empty King Street—the city’s main street—at rush hour.

“It was certainly not a place people wanted to go and certainly nobody wanted to invest in it,” said Bluhm. “Today, what you see is a street people want to walk down and talk about.”

Now an award-winning contemporary streetscape that Robert Howald, executive vice-president of Canada Lands Company, called a “model for other cities who are trying to turn their streets into a true people place,” the question on many minds is how does a mid-size city of only 220,000 in a region of half a million, without the market presence like Toronto, go from desolate to valuable investment?

Empty parking spaces on the street turned into outdoor patios; the city began closing streets on a weekend basis during the summer for festivals and occasional massive crowds.

Open-surface parking lots were transformed into developments like the University of Waterloo School of Pharmacy. Rotting buildings, once boarded-up, became repurposed and bought up by large technology companies like Google.

Old shoe factories turned to condos like the Kaufman Lofts, where owners snagged twice as much rental revenue than other buildings in the region, at $2.30 a square foot on rental rates, compared to $1.30—Kitchener’s average.

All of these feats, according to Bluhm, were possible because the city, driven by crisis, took a different approach—one that didn’t rely only on taxpayer money, but mobilized the private sector and motivated municipal resources.

“The real reason that drove us was this path of crisis,” said Bluhm. “If you watched the industry sector in 2003, you would have seen this pattern.” The value of the Canadian dollar to American dollar compared to the high percentage of manufacturing jobs prompted the city to act fast.

“If we didn’t make a significant investment, we were going to lose roughly a third to half of our employment,” Bluhm cautioned.

Clearly, a town reliant on sourcing Western business faced the risk of losing jobs to places like Mexico and China.

The city pooled $110 million in taxpayer dollars and made the conscious decision not to invest in manufacturing. Instead, the majority of dollars were invested in new types of economy, from technology and digital media to pharmaceutical research.

“Most people look at a desolate place and put money into things that create activity, like baseball stadiums and casinos; they invested in job growth,” Bluhm said, referring to the city.

Each dollar had to be catalytic in some way—stimulating other investors involved, from both the public and private sector, in turn, creating a ripple effect for whoever wanted to invest.

Motivating the private sector was a key factor in the redevelopment’s success.

“If we couldn’t motivate the private sector, nothing would come to fruition; it would just be a series of projects funded by taxpayers,” Bluhm emphasized.

Instead of formulating a common blueprint listing hundreds of “to-do” projects over a five-year window, where not even a quarter would be completed, the city created a few core concepts to spur the private sector in its fight.

Bluhm said this was the beginning of positioning Kitchener as a start-up city—one of the best places in North America to start a business. Soon, the entrepreneurial community helped facilitate the change.

Along with rebranding, the city created an innovation district in the western half of downtown, brimming with technology and pharmaceutical companies.

“What happened was developers got motivated by it and excited about the concept,” said Bluhm. “They were now the ones bringing the private sector in to add fuel to the notion of the innovation district.”

But developers and planners weren’t the only people involved in the revitalization. Since the project wasn’t limited to construction, but aimed to manifest a vibrant downtown core, Bluhm and his team began mobilizing as many resources as possible and shifting their agenda.

For example, the special events team was told it was no longer focusing on only family fun events, but animating King Street and targeting a 25- to 35-year-old demographic.

“Essentially what we said to them is, guys, you are going to actually help sell condos downtown, program events, make the street vibrant and generate economic activity,” said Bluhm.

Similarly, the team approached the local farmers’ market with the same advice. “We said, not only are you vendors who sell food, but you will begin to create a food cluster around your facility,” Bluhm added.

And with the arts and culture department normally responsible for programming public arts, their role quickly stretched to driving the creative industry.

Just fifteen years ago, a commissioned market analysis found that nobody outside of Toronto, Vancouver or Montreal desired to live in a loft-style building, and they surely didn’t want to live in downtown Kitchener.

But through investments resulting in developments like the Kaufman Lofts, which sold out in a matter of five weeks, and examples of new tech companies receiving huge capital from places like California, Kitchener is no longer a place to avoid.

Now, as observed through special events, annual festivals exceed 500,000 people, the streets are busier and almost every weekend there’s something happening to keep people talking about the city.

According to Jeff Young, current director of special events for the City of Kitchener, this vibrancy is a direct result of transforming the streets into pedestrian-friendly places.

“We’re able to do more on King Street and Civic Square because of this increased level of activity,” says Young. “People like events, they like living somewhere where things are going on, and we’re tasked by the community, council and our own internal team to come up with innovative ideas that keep attracting new events.”

At the moment, a 17-storey condo is being built downtown, promising thousands more people who will step out into the streets of Kitchener.

From viable crisis to vibrant community, this municipality is a prime example of believing in what Bluhm now highlights years later.

“No matter how obsolete your property is,” he said, “there is a way to bring about significant change.”

Rebecca Melnyk is online editor of Canadian Property Management and Building Strategies and Sustainability.

As utility costs continue to climb, it’s no surprise that building managers in both new and old buildings are experiencing increasing pressure from their tenants to take advantage of cost savings opportunities and to demonstrate that they have achieved the savings.